Other Things Held Constant, Which of the Following Would Increase

question 35

Multiple Choice

Other things held constant, which of the following would increase the NPV of a project being considered?

• A) A shift from MACRS to straight-line depreciation.
• B) Making the initial investment in the first year rather than spreading it over the first 3 years.
• C) A decrease in the discount rate associated with the project.
• D) The sale of the old machine in a replacement decision at a capital loss rather than at book value.
• E) An increase in required working capital.

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Definitions:

Confidence Interval

A confidence interval provides a range of values, estimated from sample data, that is likely to contain the value of an unknown population parameter, along with a specified level of confidence.

Standard Deviation

An indication of how much the values in a dataset spread out or diverge from one another.

Mean Grams of Fat

The average amount of fat, measured in grams, consumed or contained in a particular diet or food item.

Confidence Interval

A range of values calculated from a set of data so that it is very likely, to a specified probability, that the true parameter of the population is within this range.